If you cannot afford to pay your property tax in Singapore, then the Inland Revenue Authority of Singapore (IRAS) may take several measures and react. Here is a summary of what can happen if payments for property taxes have not been made:
1. Late Payment Penalty
Penalty Imposition: Normally, IRAS imposes a late-payment penalty for unpaid real estate taxes. Ordinarily, this penalty amounts to 5% of the outstanding tax liability. If the tax remains unpaid over a prolonged period, this proportion can be increased.
2. Demand Notice
Issuance of Notice: If after imposing the penalty, payment has not been made on time, IRAS may serve a demand notice on the property owner asking him/her to settle his debt and warning about other action that could follow soon.
3. Enforcement Actions
In case no payment is done following the demand notice, IRAS may resort to further enforcement actions including:
- Garnishment of Bank Account: To pay an outstanding tax bill through garnishing funds from the bank account belonging to the property owner whose name appears in its records, IRAS can issue a notice to such bank.
- Property Seizure and Sale: In serious cases, IRAS can seize such properties and sell them off as repayment for unpaid taxes. It is usually done as a last resort after many reminders were ignored and there were opportunities given for payment of the outstanding amount.
4. Payment Terms
Negotiating for Payment Plan: For those experiencing money problems, it is useful to notify IRAS and talk to them about your position. They might have options for making a payment plan or an installment plan which can help you in handling the debt.
5. Effect on Credit Score
Credit Implications: Failing to pay property taxes and actions taken by IRAS consequently may ruin your creditworthiness, impairing your loan application chances and ability to acquire other forms of credit in the future.
Tips on how to Handle Property Tax Payments
- Start GIRO Payments: It may be necessary that one sets up GIRO payments in order to ensure regular and timely payment of property tax. It assists in avoiding fines charged for late fee as well as missing deadlines.
- Consult Financial Experts: If you are finding it hard to meet the demands of your taxes, get some financial advice from professionals who will assist you restructure finances or even negotiate with tax authorities.
- Be Aware: Check when your tax due dates are so that you do not mistakenly fail to pay these ones.
By taking proactive measures and communicating with IRAS, property owners can manage their tax obligations more effectively and avoid the serious consequences of non-payment.